MUMBAI, May 16: Even as the shadow of anti-dumping duty on Indian exports to Europe looms large, the European Commission (EC) braces to slap yet another round of levies, this time on Indian bed linen. The anti-dumping advisory cell of the EC will meet in Brussels on May 21 to make a formal announcement.

Senior textile ministry officials said the commission's move comes as a retaliatory measure since its effort to clamp a definitive duty on Indian grey fabrics exports was quashed on Thursday.

Companies, which could be the worst hit by the impending provisional duties, include Bombay Dyeing, Standard Industries, Modern Terry Towels and Anglo French Textiles. Ministry officials said the EC is `hell-bent' on imposing the duty, which could range from three per cent to 27 per cent. The average duty will be 13 per cent.

Senior industry sources said the duty would be 9 per cent on Bombay Dyeing, 10 per cent on Standard Industries and a whopping 27 per cent on Anglo French Textiles.

A senior Bombay Dyeing source said: "Like in the grey fabric issue, the industry will request the textile and commerce ministries to take up the matter with the World Trade Organisation. On our part, we will help the Indian embassies in the various EU nations to lobby with the governments."

The total quantum of Indian made-up fabrics in 1995-96 was around $700 million, while total exports to the European Union stood at $420 million. Of this, total bed-linen exports was about $250 million, sources said.

The investigation into bed-linen exports, initiated in January this year, had probed exports by all major companies. According to the rules, for the the duty to be given a definitive shape, the majority of EC member-nations have to vote for it within the next six months.

The provisional duty is also to be imposed on Pakistan and Egypt at average rates of six per cent and 13 per cent respectively. Industry sources said that certain top companies in Pakistan are likely to get away with zero import duty.

EU is targeting Indian products to create a protectionist mechanism before 2004 when the quota system will be phased out, said observers.

The EU on Thursday dropped anti-dumping duty on Indian textiles exceeding Rs 600 crore. Nine member-nations voted in favour of the duty withdrawal, while six favoured their continuation.

The EC has imposed anti-dumping duty on cotton grey fabrics, citing injury to domestic manufacturers. Industry bodies took up the matter with the EC saying that the problems faced by the European manufacturers are primarily on account of rising costs, higher productivity and higher wages.

The European processing industry has also exerted pressure on the EC, protesting against the imposition of these levies.

Cotton textile exports continue to maintain robust growth rate despite quota system and anti-dumping barriers and crossed the $3 billion mark in 1996. Exports during the 10 months of the current financial year totalled $2.75 billion, a growth of 25 per cent.

Despite this growth rate, India's share in the world textile trade is only 2.5 per cent. The phasing out of quota systems by the year 2004 will remove one of the barriers to accelerated growth of textile exports, sources said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.